This model of the macroeconomy (closed social system) is as comprehensive as possible without it being too complicated...
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This model of the macroeconomy (closed social system) is as comprehensive as possible without it being too complicated (according to Prof. Einstein's dictum for providing in an explanation as much simplification, but not too much). In the past the tradition of 2 and 3 sector models (householder/producer etc.) were oversimplified. In this model there are 6 "entities" all of which play vital roles in the complete system. Their 19 individual roles or functions can be seen when the various flows of goods, services and valuable documents are examined. They each take an algebraic symbol (for later use in analysis). These flows are mutual, money always passing in the returning reciprocal direction. It is seen that the 3 Smithian factors of production (Land, Labour and Durable Capital Goods) are all properly included along with their 3 returns, Ground-Rent, Wages and Interest (Dividends etc.).

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